The coffee at Peet’s tastes better than Starbucks (at least to me). Peet’s offers free wifi while at Starbucks you have to pay for wifi through AT&T. The price of a medium Café Latte at Peet’s and at Starbucks (I refuse to call a medium a “Grande”) in Palo Alto is the same @ $3.35 . So at Peet’s I get better tasting coffee, free wifi and at the same price – yet I go to Starbucks more often.

Why you ask. It is because of technology and the IPhone !

For those of you that are IPhone users and coffee drinkers you will have no doubt downloaded the Starbucks locater application. An easy to use app with fully enabled location-based service the myStarbucks application finds the closest store, lets you know the store hours, get directions and even lets you invite a friend directly from the application. Now even though I prefer Peet’s coffee to Starbucks, when I am in an area I am not familiar with there is no way for me to locate a Peet’s coffee easily. As such, I simply press a couple of buttons on my IPhone and it instantly tells me the closest Starbucks and gives me directions on how to get there.

Now to make it even more easier, Starbucks is piloting a new mobile payment application that allows you to pay for your coffee using your IPhone. Essentially you pre-load money into the application and after ordering your drinks swipe the barcode from your IPhone app over the barcode reader at the store and presto you are done. Starbucks is piloting this application at selected stores in the Silicon Valley and Seattle.

I am sure that because of these simple and easy to use IPhone applications Starbucks is attracting more customers to its stores. It only costs $20,000 – $30,000 to build an IPhone application – a small amount compared to what I am sure is spent on traditional advertising. You would think that Peet’s would figure this out and realize that they are losing customers to Starbucks simply because people find it harder to locate their stores.

Innovative, easy to use and relevant mobile applications are changing the way we work and play. Companies that truly take the time to understand the needs of their customers and provide such powerful yet simple mobile solutions have much to gain.